Young Australians aged 18 to 29 have cut back the most due to cost-of-living pressures while older people are shopping more, data compiled by Australia’s biggest bank shows.
An analysis of the de-identified payments of about 7 million Commonwealth Bank customers, released by the bank on Tuesday, showed the “generational spending gap” between older and younger Australians grew for a second year in a row.
In the three months to September, 18- to 29-year-olds reduced their spending by 2% compared with the same period in 2024, with a “notable decline” in both essential and discretionary spending.
Young Australians reduced their spending on essentials such as petrol and bills by 2.3% and pulled back by 1.9% on discretionary items such as clothes and holidays.
People aged 30 to 39 also spent less, with a 1.1% drop in essential spending and 1% reduction in the discretionary categories, which also included household items.
By contrast, people aged 60 to 69 lifted their spending by 3.9% overall, while over-70s increased their spending by 7.7%.
CommBank iQ’s head of innovation and analytics, Wade Tubman, said younger Australians were less likely to own a home outright or have as strong financial buffers as older people, who were also more likely to spend on essentials such as healthcare.
He said the discrepancy was a reversal from the period immediately after the pandemic restrictions, when younger people were quicker to start going out and spent more than older people.
“It is something that changes over time. It’s not been the same forever,” he said.
“Younger people are now in the second year of having to … budget, make brand choices, make category choices, and, conversely, older people are in the second year of a more relaxed spending position.”
CommBank iQ prepared its latest cost-of-living insights report in the same quarter that Australia’s headline inflation sank to 2.8%, its lowest level since the March quarter of 2021.
Electricity prices fell by 17.3%, while automotive fuel fell 6.7%, according to the Australian Bureau of Statistics, which combined with elevated interest rates eased price pressures in the economy.
Tubman said many homeowners were now more likely to be concerned about their mortgages than their daily budgets.
He said cheaper energy and petrol prices meant people were spending less on these essential items but discretionary costs were still high, which was partly why younger Australians had reduced their spending.
“Younger people only spend 40% of their money on essential items,” he said. “They typically spend 60% on discretionary [items], whereas older Australians are almost the reverse of that.”
Tubman also noted that some of the geographic trends recorded by the CBA had continued, with Western Australia “really outperforming” the rest of the country in how much residents had spent.
Western Australia experienced the highest growth in spending at 3.1%, driven by leisure and travel spending, followed by Queensland with a 3.9% increase.
Victoria reported the lowest spending growth at 0.4%.
“It really does matter not just how old you are, and what housing situation you’re in, but which state you live in,” Tubman said.
CommBank iQ is a joint venture between CBA and the data science and artificial intelligence company Quantium.
